Allowing single-brand retailers to sell online first to help global firms tap Indian market: Deloitte

The government recently relaxed norms for single-brand retailers having foreign investment to attract global players. It has now permitted them to sell goods through online stores before opening brick-and-mortar stores within two years.

The government's announcement to allow single-brand retailers to sell goods online first before opening brick-and-mortar stores is a win-win for global players to tap the domestic market, consultancy firm Deloitte said on Saturday.

The government recently relaxed norms for single-brand retailers having foreign investment to attract global players. It has now permitted them to sell goods through online stores before opening brick-and-mortar stores within two years.

According to the Union Commerce and Industry Minister Piyush Goyal, online sales will also lead to creation of jobs in logistics, digital payments, customer care, training, and product skilling. It has also relaxed certain provisions for complying with the mandatory 30 per cent local sourcing requirements.

"A retail company can now start selling to the Indian consumers via online platform and open up a physical store later (within a period of two years). This is going to be a clear win-win for global retailers to tap the Indian market sitting overseas," Anil Talreja, Partner at Deloitte India, said.

He said the move would also give a boost to the pillars of the Indian retail industry in the form of transportation, payments, customer care and warehousing.

"The Indian customer stands to gain as he gets the goods before the opening of the store in India. The retailer stands to gain as he can tap the Indian market earlier than never before," he added.

On permitting 100 per cent foreign direct investment in contract manufacturing, Talreja said that with this the government has substantially expanded the arena for the foreign investors to play in India.

To boost domestic manufacturing, the Government also approved 26 percent FDI has been allowed in digital media.

On the FDI in digital media, Jehil Thakkar, Partner Deloitte India, earlier said, “FDI in digital media is a welcome development. Clarity around this fast growing segment of the media industry will act as an enabler for capital infusion. Significant value will be unlocked going forward.”

(Disclaimer: Additional background information has been added to this PTI copy for context)